It is called a "balance sheet" because assets equal liabilities plus shareholder equity.

Assets

Current Assets – assets that can be converted to cash within 12 months, which include cash, accounts receivable, inventories and prepaid expenses. Banks often look at these to determine collateral availability and cash flow available to pay back loans.

Balance Sheet Ratios

Current Ratio – informs you whether or not you have enough liquid assets to meet your debt obligations over the next 12 months. It is calculated by dividing current assets by current liabilities. If current liabilities are greater than current assets, a company may have trouble meeting its short-term obligations.

Tangible Net Worth – a good indicator of the strength of a company. Measures the physical worth of a company, less intangible assets such as patents, loan fees and intellectual property. The higher the value, the stronger the company. Calculated as follows:Tangible Net Worth = Total Assets – Liabilities – Intangible Assets

Leverage Ratio – measures the degree of debt compared to a company's overall equity. Gives bankers an idea of how much equity a company has at its disposal. It is calculated by dividing the company's total debt by its equity. Often, the calculation removes any intangible equity from the calculation.